Cargotec’s January–June 2019 half year financial report: Good progress in Hiab and Kalmar

CARGOTEC CORPORATION, 2019 HALF YEAR FINANCIAL REPORT, 18 JULY 2019 AT 2.00 PM EEST

Cargotec’s January–June 2019 half year financial report: Good progress in Hiab and Kalmar

  • Strong profit growth in Kalmar
  • Record high operating profit in Hiab
  • Weak result in MacGregor

April–June 2019 in brief: Operating profit increased

  • Orders received decreased by 11 percent and totalled EUR 872 (981) million. Comparison period included a single order for Kalmar worth around EUR 80 million.
  • Order book amounted to EUR 2,072 (31 Dec 2018: 1,995) million at the end of the period.
  • Sales increased by 12 percent and totalled EUR 911 (816) million.
  • Service sales increased by 5 percent and totalled EUR 259 (247) million.
  • Service and software sales represented 33 (34) percent of consolidated sales.
  • Operating profit was EUR 53.0 (21.3) million, representing 5.8 (2.6) percent of sales. 
  • Comparable operating profit increased by 12 percent and amounted to EUR 64.3 (57.2) million, representing 7.1 (7.0) percent of sales. 
  • Cash flow from operations before financial items and taxes totalled EUR 41.4 (26.5) million.
  • Net income for the period amounted to EUR 29.0 (2.3) million.
  • Earnings per share was EUR 0.45 (0.03).

January–June 2019 in brief: Orders received increased

  • Orders received increased by 3 percent and totalled EUR 1,894 (1,844) million.
  • Sales increased by 11 percent and totalled EUR 1,767 (1,589) million.
  • Service sales increased by 5 percent and totalled EUR 508 (484) million.
  • Service and software sales represented 33 (34) percent of consolidated sales.
  • Operating profit was EUR 104.1 (74.5) million, representing 5.9 (4.7) percent of sales. 
  • Comparable operating profit increased by 6 percent and amounted to EUR 121.7 (114.7) million, representing 6.9 (7.2) percent of sales. 
  • Cash flow from operations before financial items and taxes totalled EUR 72.3 (22.8) million.
  • Net income for the period amounted to EUR 60.0 (36.0) million.
  • Earnings per share was EUR 0.93 (0.55).

Outlook for 2019

Cargotec reiterates its outlook published on 8 February 2019 and expects its comparable operating profit for 2019 to improve from 2018 (EUR 242.1 million).

Cargotec’s key figures

Cargotec applies the accounting standard IFRS 16, Leases, and the interpretation IFRIC 23, Uncertainty over Income Tax Treatments, starting from 1 January 2019. More information on the standards is available in Note 2, Accounting principles and new accounting standards. Cargotec has also refined the definition of service business for Hiab and MacGregor from the beginning of 2019. The figures related to service business have been restated for the comparison period 2018 accordingly. Cargotec has published a stock exchange release on 4 April 2019 regarding the changes. 

MEURQ2/19Q2/18ChangeQ1-Q2/19Q1-Q2/18Change2018
Orders received872981-11%1,8941,8443%3,756
Service orders received2792588%5405145%1,031
Order book, end of period2,0721,78616%2,0721,78616%1,995
Sales91181612%1,7671,58911%3,304
Service sales2592475%5084845%980
Software sales*412942%796130%147
Service and software sales,
% of Cargotec’s sales
33%34% 33%34% 34%
Operating profit53.021.3> 100%104.174.540%190.0
Operating profit, %5.8%2.6% 5.9%4.7% 5.8%
Comparable operating profit64.357.212%121.7114.76%242.1
Comparable operating profit, %7.1%7.0% 6.9%7.2% 7.3%
Income before taxes44.915.5> 100%87.762.041%161.1
Cash flow from operations before financing items and taxes41.426.556%72.322.8> 100%125,8
Net income for the period29.02.3> 100%60.036.067%108.0
Earnings per share, EUR0.450.03> 100%0.930.5570%1.66
Interest-bearing net debt, end of period87658949%87658949%625
Gearing, %62.2%42.7% 62.2%42.7% 43.8%
Interest-bearing net debt / EBITDA**2.82.3 2.82.3 2.3
Return on capital employed
(ROCE), last 12 months, %
9.1%8.0% 9.1%8.0% 8.0%
Personnel, end of period12,33511,5027%12,33511,5027%11,987

*Software sales include Navis business unit and automation software
**Last 12 months’ EBITDA

Cargotec’s CEO Mika Vehviläinen: Operating profit increased at Kalmar and Hiab

The second quarter of 2019 was two-fold at Cargotec. Result at our biggest business area Kalmar developed strongly and its operating profit grew by 41 percent. Operating profit increased also at Hiab and in the second quarter it was the best ever. We made progress in solving the supply chain challenges during the beginning of the year. 

On the other hand, MacGregor’s market situation remained challenging and its operating profit declined. During recent years we have already reduced MacGregor’s costs significantly, and we will continue with the streamlining during the second half of 2019 as well. We strengthen MacGregor by acquiring of the marine and offshore businesses of TTS Group ASA. All the needed regulatory approvals to be able to complete the transaction have now been received and we expect to close the transaction on 31 July 2019. The scale benefits of the acquisition create opportunity to further improve productivity and global presence. The merger of the two leading companies in their field provides us with excellent opportunities to better serve our customers, strengthen our competitiveness and continue to develop our products and services.

In terms of orders received, the good development continued at Hiab with orders increasing by 13 percent compared to the comparison period. Kalmar’s orders received declined, which was to be expected, as the comparison period’s order intake included an 80 million euro agreement to deliver a state-of-the-art, fully automated terminal solution to Australia. At MacGregor the orders received decreased.

Our service and software business continued to develop favourably. Service orders received increased by eight percent and service sales increased by five percent. Software sales grew by 42 percent. The sales of our services and software business was close to 1.2 billion euros during the last 12 months, keeping us well on track in terms of our target to reach 1.5 billion euros.

Reporting segments’ key figures

Orders received

MEURQ2/19Q2/18ChangeQ1-Q2/19Q1-Q2/18Change2018
Kalmar417550-24%934983-5%1,919
Hiab34030113%68160812%1,259
MacGregor116131-11%28125510%580
Internal orders-1-1 -1-1 -1
Total872981-11%1,8941,8443%3,756

Order book

MEUR30 Jun 201831 Dec 2018Change
Kalmar1,1011,0129%
Hiab4534530%
MacGregor519530-2%
Internal orders-2-1 
Total2,0721,9954%

Sales

MEURQ2/19Q2/18ChangeQ1-Q2/19Q1-Q2/18Change2018
Kalmar42738910%8287609%1,618
Hiab35829522%67457118%1,149
MacGregor127133-5%2662592%538
Internal sales00 0-1 -2
Total91181612%1,7671,58911%3,304

Operating profit

MEURQ2/19Q2/18ChangeQ1-Q2/19Q1-Q2/18Change2018
Kalmar34.624.541%65.852.426%138.1
Hiab47.339.420%80.775.57%133.8
MacGregor-12.92.8< -100%-13.63.0< -100%-4.2
Corporate administration and support functions-15.9-45.465%-28.8-56.349%-77.7
Total53.021.3> 100%104.174.540%190.0

Comparable operating profit

MEURQ2/19Q2/18ChangeQ1-Q2/19Q1-Q2/18Change2018
Kalmar37.725.249%70.053.930%143.6
Hiab50.639.429%84.375.512%134.5
MacGregor-11.03.5< -100%-9.84.2< -100%-1.6
Corporate administration and support functions-13.0-10.9-18%-22.8-19.0-20%-34.4
Total64.357.212%121.7114.76%242.1

Press conference for analysts and media

A press conference for analysts and media, combined with a live international telephone conference, will be arranged on 18 July 2019 at 3.00 p.m. EEST at Cargotec’s head office, Porkkalankatu 5, Helsinki. The event will be held in English. The report will be presented by CEO Mika Vehviläinen and Executive Vice President, CFO Mikko Puolakka. The presentation material will be available at www.cargotec.com by latest 2.30 p.m. EEST.

The telephone conference, during which questions may be presented, can be accessed with access code 802270 using the following numbers:

FI: +358 (0)9 7479 0360
SE: +46 (0)8 5033 6573
UK: +44 (0)330 336 9104
US: +1 323-794-2558

The event can also be viewed as a live webcast at www.cargotec.com. An on-demand version of the conference will be published at Cargotec’s website later during the day.

For further information, please contact:
Mikko Puolakka, Executive Vice President and CFO, tel. +358 20 777 4105
Hanna-Maria Heikkinen, Vice President, Investor Relations, tel. +358 20 777 4084

Cargotec (Nasdaq Helsinki: CGCBV) enables smarter cargo flow for a better everyday with its leading cargo handling solutions and services. Cargotec's business areas Kalmar, Hiab and MacGregor are pioneers in their fields. Through their unique position in ports, at sea and on roads, they optimise global cargo flows and create sustainable customer value. Cargotec's sales in 2018 totalled approximately EUR 3.3 billion and it employs around 12,000 people. www.cargotec.com


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